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retirement downsizing home ??
Old 12-01-2007, 04:46 PM   #1
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retirement downsizing home ??

Hi,
I am 53 and have been in education for 30 years and am looking foward to retiring in the next couple of years. I can max out my pension if I wait 4 more years but don't know if I can make it. My wife is already retired and receives a 50 K pension. Mortgage is 300K with about 300k equity. I can retire at the end of this year and recieve a pension of 57K max out in 4 more years at about 70K. I still like my job as a high school administrator but don't love it like I used to. We are thinking of downsizing and moving into a condo to lower expenses and either eliminate a mortage or at least reduce it.
When to retire? When to downsize?
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Old 12-01-2007, 05:33 PM   #2
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Originally Posted by msully76 View Post
Hi,
I am 53 and have been in education for 30 years and am looking foward to retiring in the next couple of years. I can max out my pension if I wait 4 more years but don't know if I can make it. My wife is already retired and receives a 50 K pension. Mortgage is 300K with about 300k equity. I can retire at the end of this year and recieve a pension of 57K max out in 4 more years at about 70K. I still like my job as a high school administrator but don't love it like I used to. We are thinking of downsizing and moving into a condo to lower expenses and either eliminate a mortage or at least reduce it.
When to retire? When to downsize?
Welcome.

You will probably know "when to" better than any of us can tell you.

With $107k pensions at the end of this year, seems like the choice is entirely up to you and how much you still find going to work pleasant enough to continue going in. Have you decided on a retirement "needs/wants" level of income yet? Do you get to continue employer health insurance on a self-pay basis? What will you do for health insurance otherwise? Do you have kids still at home needing to be covered (and otherwise "paid" for)?

You could get the downsizing done, and adjust to the new quarters, and be sure you like your new situation before chucking it in at work.

What other assets/income do/will you have besides pensions? Are your pensions Cola'd? If you haven't already, you can be working out answers to these questions before seriously considering telling yiur employer adieu, sayanara, aufweidersein, toodles, I'm outta here.
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Old 12-01-2007, 05:36 PM   #3
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Welcome, msully!

Let me get this straight. You could retire now and you and DW would have $107K in pensions income? Is it COLA'd?

I'm not clear what your NW is as you don't mention any assets other than your home. But if I had $107K in COLA'd pension I would be out the door, FAST.
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Old 12-01-2007, 05:43 PM   #4
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Thanks for the quick response. I am brand new to all of this so be patient as I work my way through this.

We don't have any outstanding bills other than the mortagage. My wife is a retired educator as well and we do get health insurance with our pension. We do have to pay 20% ($280) a month. Other assests include $230K in a Tax Shelter Annuity.
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Old 12-01-2007, 06:02 PM   #5
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Considering you have cola'd pensions and health insurance covered, it sounds like you are in a very good position to retire whenever you wish. My husband and I are about your age and planning to retire very soon - myself in 2 months and him within a year. Like you, we are planning to downsize our home. I understand about not loving your job like you used to. One of the good things I see about hitting my 50s is how my priorities have changed. When I was in my 30s and 40s, I was very career oriented and focused on climbing up the ladder. Now I just want a simple life and the opportunity to refocus on things that really mean something to me.

I wish you the best of luck.
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Old 12-01-2007, 08:01 PM   #6
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Good luck with your plans! One word of advice from new townhome owner: be sure to look at the financials of your condo HOA! Talk to the current board president about any "problems down the road." You'd be surprised how many people buy into a HOA without doing that.
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Old 12-01-2007, 09:43 PM   #7
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One thing that really surprised me the last few months as I have become acquainted with this board is the large number of people who live quite happily on less than $40K per year. I had (and continue) to plan on having around $100K per year between pension and 401K withdrawal (4% SWR) but the more I've looked into it, the more I'm convinced that we could probably live on much less.

I spent Thanksgiving with my retired parents and told them I had started some serious retirement planning and asked them what they lived on. I was surprised to hear that they lived comfortably on my father's $55K per year pension and have not had to touch their $1M+ 401K yet after 10 years of retirement.

Look at some of the links in the "Best of" section and you'll some good discussion of what people live on. Of course it will vary for everyone, but it was a real eye opener for me. CORRECTION: It's the FAQ section that has the variations on the how much do you need/spend to retire, not the "Best of."
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Old 12-01-2007, 11:08 PM   #8
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Thanks for the quick response. I am brand new to all of this so be patient as I work my way through this.

We don't have any outstanding bills other than the mortagage. My wife is a retired educator as well and we do get health insurance with our pension. We do have to pay 20% ($280) a month. Other assests include $230K in a Tax Shelter Annuity.
So if you do downsize, the home mortgage is gone, and you have an additional $300k freed up. If you can get into the type condo you want for $300k, then you are still mortgage free. Sweet.

You have $230k tax deferred for emergency medical, nursing home, family world tours, or other once in awhile contingencies. And if you can keep this pot growing in excess of inflation rate, then you have additional inflation protection besides your pension Colas. And besides the SS you can qualify for in as few as 9 more years

You get very reasonable health insurance (Question--will you stay in same area----is that employer retiree health insurance portable to other areas/states if you move?).

So, the only questions remaining are:
1) what would your retirement need/wanted level of expenses be, and would $107k pensions cover it, or would $120k be needed?
2) If $107K is enough or more than enough, do you still get enough enjoyment from your job to keep going in another 2, 3, 4 years?

Looks to me like you are in the drivers seat.

One last question: How much is it worth to you to use the next 2, 3, or 4 years sitting in the office---that is--Will you regret not having ER'd at the end of this year, 3 or 4 years from now?
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Old 12-02-2007, 07:35 AM   #9
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When I ERd I had been planning to work a few more years but, once I convinced myself that the finances were good, I could no longer focus on work at all. I made an overnight decision to go and advised my boss the next day. Never had a second thought about the decision.
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Old 12-02-2007, 10:57 AM   #10
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Welcome ,
The only other thing I would look at is if both of you would be okay if something happens to one of you .
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Old 12-02-2007, 04:44 PM   #11
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Hi,
I am 53 and have been in education for 30 years and am looking foward to retiring in the next couple of years. I can max out my pension if I wait 4 more years but don't know if I can make it. My wife is already retired and receives a 50 K pension. Mortgage is 300K with about 300k equity. I can retire at the end of this year and recieve a pension of 57K max out in 4 more years at about 70K. I still like my job as a high school administrator but don't love it like I used to. We are thinking of downsizing and moving into a condo to lower expenses and either eliminate a mortage or at least reduce it.
When to retire? When to downsize?

If you are a high school administrator that is well liked and admired by the teachers in the building PLEASE DON'T leave!!!

All kidding aside I left my 30 year teaching career in January of 07 at 51 YO and took a reduced pension of 33K with full COLA and medical bennies for the two of us. Sold the big house with the 215K mortgage for 515K bought a house for just about cash in NC and now teach 3 days a week at 3 different elementary schools Phys Ed to K-5th graders. What a blast. Plus they are paying me at the 25th step 60% salary.

It doesn't get much better.

You guys are GOLDEN!!! Over 100K in pensions, my wife gets a small pension next year of about 4K so we are at about 40K in pensions and another 33K in part time work and we want for nothing!!

Go for it!
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Old 12-02-2007, 06:23 PM   #12
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I'll just add my two cents to a familiar tune on this board. I was going to wait another year to retire. I was sitting on the fence because caseloads were growing but staff was not! Things continued to get worse and something happened at work to push me over the fence. I took the plunge on 11/09. I was asked to reconsider but was steadfast in my decision. I'm glad I did. I think that it's just a matter of time until you say adios! It sounds like you have two good choices. A. You still like your job and could continue to work a few more years or B.You could retire now and be sitting in the catbird sit!
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Old 12-02-2007, 06:40 PM   #13
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There's another way you can look at it. Take your "present salary" minus $57,000 (retirement) and that is what you are working for every day. So if your salary is $70,000 - $57,000 then you are working for $13,000 a year plus any benies. But I suppose you already thought about that!
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Old 12-03-2007, 12:55 PM   #14
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Hi newguy888,

I too used to teach P.E. at the elementary level but lost all my hair in one year.
I have thought of doing what you are doing as well, leaving my current state and go teach or continue as an administrator in another while I continue to collect my pension. I would love to find an administrators position that is part time.
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Old 12-03-2007, 05:58 PM   #15
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Hi newguy888,

I too used to teach P.E. at the elementary level but lost all my hair in one year.
I have thought of doing what you are doing as well, leaving my current state and go teach or continue as an administrator in another while I continue to collect my pension. I would love to find an administrators position that is part time.
North Carolina, Wake County take a look!!

I would not teach at one school full time at the elementary level in the gym. You must be on the top of your game every min of every class. Those little kids are well shot out of a cannon when they get to the gym!!
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Old 12-11-2007, 12:05 PM   #16
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Hi MSully,

I can't tell you when to retire or when to downsize, no one can because everyone has their own personal reasons for hanging in there or staying in a home they've grown attached to. But what I can say is that there are numerous areas of the country where you could take that 300,000 equity that you currently have in your existing house and actually up size house wise. Where I am at, with 300k, you could easily have a six bedroom, three car garage, four bath home with over 4000 square feet and a full basement, sitting on 10 acres with your own personal pond. If you are merely wanting a two or three bedroom patio type home, one where you still have a single family home but someone else does all the maintenance outside and yard work, you can pick up one of those in this area for around 125-150k. From what I recall, the association fees weren't too bad, running around 90/month. I always jokingly tell my friends that Kansas may not be the ideal place to live scenic wise, but it is probably the one of the best places in the nation to take a vacation from and also one that will allow most to afford to do such.

Anyway, it sounds like you have got it well together and have a lot of options available to you. I realize everyone likes certain areas of the nation for a variety of reasons, but one thing you might consider since everyone of your assets appears to be COLA protected, is other areas of the nation. By selectively moving, assuming it is an option, you could actually improve your standard of living and have it cost you a lot less as well.
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